Actually, for those who push for these cloudy solutions, they do that in part to make data close to you. I am talking mostly about CDNs, I don't thing YouTube and Netflix would have been possible without them.

Google is a US company, but you don't want people in Australia to connect to the other side of the globe every time they need to access Google services, it would be an awful waste of intercontinental bandwidth. Instead, Google has data centers in Australia to serve people in Australia, and they only hit US servers when absolutely needed. And that's when you need to abstract things out. If something becomes relevant in Australia, move it in there, and move it out when it no longer matters. When something big happens, copy it everywhere, and replace the copies by something else as interest wanes.

Big companies need to split everything, they can't centralize because the world isn't centralized. The problem is when small businesses try to do the same because "if Google is so successful doing that, it must be right". Scale matters.